Page 269 - Orlicky's Material Requirements Planning

248 PART 3 Managing with the MRP System

AN INVENTORY PLANNING
AND CONTROL SYSTEM
This function of an MRP system has been described and discussed in some detail in the
preceding chapters. We have seen how an MRP system answers the fundamental ques-
tions of:
■ What to order
■ How much to order
■ When to order
■ When to schedule delivery
An MRP system also can furnish several types of additional inventory management
information, including, as mentioned earlier, a forecast (more precisely, a projection) of
future inventory investment and clues to an indicated write-off of obsolete and/or inactive
items.
Assuming proper system implementation and file data integrity, an MRP system’s
outputs are always correct and valid relative to the MPS that the system translates into
material requirements, and the system signals for correct inventory action at all times.
The timeliness of the system’s inventory control outputs is a function of replanning fre-
quency (discussed in Chapter 7), which is controlled by the system user.
An MRP system is self-adjusting in that it constantly replans and reallocates existing
inventories to changing requirements via the netting process. Manufacturing inventories
therefore are minimized relative to the management-imposed MPS, lot-sizing policy, and
safety stock and the constraining factor of manufacturing lead times.

A PRIORITY PLANNING SYSTEM
The key to priority planning and priority control of work in the factory is valid open-
order due dates. The order due date establishes the relative priority of the order in ques-
tion, which must contend for limited productive capacity with other orders in the shop.
Each shop order entails a number of operations that must be performed to complete the
order. A distinction therefore must be drawn between:
■ Order priority
■ Operation priority
Shop scheduling, loading, dispatching, and job-assignment techniques are based on
operation priorities. These priorities, to be valid, must be derived from valid order prior-
ities, that is, valid order due dates. An MRP system has the capability to establish valid
order priorities at the time of order release and to maintain them up-to-date and valid by
revising a due date that has been invalidated subsequently. This capability is inherent in
any MRP system, and it exists whether or not the user takes advantage of it.